Sunbelt View Of North Looks Like A Snow Job

April 14, 1986|By James G. Driscoll, Business Editor

In the Snow Belt, or the Rust Belt, business people made so many mistakes that it`s no wonder the economy there is down and, in some cases, out.

In the Sun Belt, where business thinking is more innovative and less constricted by obsolete patterns of the past, robust economies mean thriving businesses and ever-growing numbers of jobs. Don`t they?

Sure, buddy. Get out of the sun for a minute and cool off. And, buddy, can you spare a dime?

The chorus of Sun Belt success, and the supposed inevitability of that success, sounded real and true for many years for many of us in the nation`s warmer and brighter climes. The sun would shine, the economy would bloom and those freezing and jobless suckers in the North would continue to envy us. Wasn`t it, after all, ordained that the South and Southwest would take the high economic ground and hold it?

Actually, no. Actually, the only unchanging rule in economics is that economists will disagree. In reality, no region of the nation is immune to troubled economic times, as a large chunk of the Sun Belt is demonstrating right now.

In Texas, where high flying entrepreneurs just knew they were smarter and braver and more macho than their pathetic northern cousins, recession is replacing self-confidence and trampling arrogance. After a couple of years of slowdown from the frenetic growth of the past two decades, Texas now is being hit very hard by the plummeting of oil prices.

Businesses are failing, workers by the thousand are jobless and the mighty state of Texas is learning, if not humility, at least reality. It is learning that those dumb clucks up North may not have been so inept after all. It is learning that the Billy Joe Cowboys of the world are just as susceptible to economic disaster as the Sam Steelworkers.

In Texas, in Louisiana, in Oklahoma and in other states where the economy was overly dependent on oil, business leaders are beginning to readjust, to look around for a life raft. They are starting to think, for example, the way the leaders of America`s steel industry have been forced to think for the past few years.

Chairman Donald Trautlein of Bethlehem Steel Corp. stripped all fat and subtlety from his statement in a new issue of an employee publication:

``We need money to operate on a monthly basis,`` declared Trautlein. ``It is absolutely necessary for Bethlehem to make money. We`ve got to focus all of our resources on the need for Bethlehem`s near-term profitability to allow us to survive.`` Have you ever seen a more direct statement of the bottom-line necessity?

Survival, if it occurs for America`s steel industry, will mean smaller and leaner. David Cantor, a specialist in steel industry economics for the Library of Congress, says the industry will have to trim down even more. But, he adds, ``while the industry may be slimmer in 1990, it will also be a lot smarter, a lot stronger and lot more competitive.``

Oil business leaders, too, are being compelled to think in terms of smaller and more efficient enterprises. The political leaders of their states will need to think more about diversifying their economies.

Whether it`s an overreliance on steel, on oil, or on the Florida twins of tourism and real estate, the one-industry or two-industry economies are most vulnerable to recession and depression.

So the message that applies to the Rust Belt and to the oil states also applies to Florida: Diversify. Then diversify some more. And then diversify still more.

Get high tech. Get low tech. Get no tech if you have to. Make sure the economic mix is rich with the diversity of many ingredients.